TRICKY Ethics on Mock PM why, receiving, approval, because

atate2007

Can anyone help with these three I got wrong please?
1. I see why A is correct (I guess you’re allowed to say CFA Charter is the best). But why is B wrong? It says he hadn’t updated performance in 6 months. Don’t you have to do it only annually?
4. I see why C is correct. But why is A wrong? Is it because not receiving advance approval from compliance is a violation of FIRM policy but since this is not stipulated by CFA Standards, it is not a violation of CFA Standards? In other words, A and C are violations but only C is a violation of the Code and Standards.
6. This one completely puzzles me. Why is A wrong–why can’t you refer brokers to clients? Is it just because he didn’t disclose it? Why is B wrong? I put this b/c it’s client directed brokerage so I remember reading in Ethics that you have to get client to sign a letter sayng they recognize you will still try to get them best execution. And why is C right–if it’s client directed brokerage it doesn’t have to be best execution?

wizofoz

welcome to CFAI world. Last year ethics on real exam was just like that. There were 2 correct answers to most of the questions

ayodayo

i think 1 is not B because it’s misleading to leave website even if it’s been only a week.
4 not sure where you see 5 day restricted period in the problem, and it’s recomeded not required?
6. maybe you read it as “least likely”?? but it says which is most likely a violation.
it’s not client directed brokerage, only first client directed but then are more clients joined and you can’t just require them to sign statement and be done.
A is wrong because you can have referrals (not always), so it’s not a violation
B is wrong because you don’t have to explain consequences of bad execution so it’s not a violation

giants2010

1. I think you’re right =Nolife. I think the rule is that you should show performance annually, but the key here is that he has consistenly outperformed, but all of a sudden he’s underperforming. So a radical change has occurred. It is disingenous to just leave the website as is–especially for 6 months.
4. The 5 day restricted period is choice B. I ruled that one out. It’s between A and C.
6. WOW I was totally overreading this one before. It’s real simple. Question asks which is most likely a violation. A is not a violation because you are allowed to refer brokers to clients. B is not a violation because he does explain the consequences–he makes clients sign a statement that says “I am aware of the consequences of my account.” What he does violate is Choice C–he does not give clients best execution and even tells them so.
Got 1 and 6 down I think–just need help with 4…..

LorrinCFA

C has nothing to do with Research standard, it has to do with priority of transactions.

luda002

C is the right ansewr lol

Analyze_This

C directly relates to ROS requirements; A directly relates to ROS recommendations. So C is a violation as it is required.
Very nitpicky…i chose A initially as well….

skycfa

hahah go me

WarrenB1

Yeah this is really nitpicky…

ryanlb

What got me with question 6 is that it says best price AND execution. Can someone refer me to where best price and execution is stated in the standards? In fact, isn’t it often alluded to that best execution is not necessarily best price. So to combine these two as both being necessities by including the “and” threw me. I suppose I may be overthinking this, but anyone see my point?